Shares of Okta (NASDAQ: OKTA) are surging after reporting stronger-than-expected second-quarter financial results and raised its outlook for the full fiscal year, with artificial intelligence (AI) emerging as an increasingly important source of demand.
Shares of the of identity security company jumped more than 19% in extended trading Wednesday, climbing above $160 after closing the regular session at $134.42.
For its fiscal second quarter, ended July 31, Okta reported revenue of $805 million, an increase of 11% from the same period a year earlier. Subscription revenue rose 12% to $793 million.
The company posted GAAP net income of $116 million, or 65 cents per diluted share, up from $67 million, or 37 cents per share, in the year-ago quarter. On an adjusted basis, Okta earned $1.05 per share, compared with 91 cents a year earlier.
Okta’s subscription backlog, measured as remaining performance obligations (RPO), increased 17% to $4.86 billion. Current remaining performance obligations (cPRO), revenue expected to be recognized during the next 12 months, rose 14% to $2.59 billion.
Operating cash flow increased to $234 million from $167 million, while free cash flow climbed to $227 million from $162 million in the second quarter of fiscal 2026. Okta’s earnings release also showed GAAP operating income more than doubling to $107 million.
The results come as Okta expands its focus beyond traditional workforce and customer identity management to securing AI agents, which can independently connect to enterprise systems, access sensitive information and perform actions on behalf of users.
“As AI agents transform every layer of technology, every agent needs a trusted identity and clear controls over what it can access and do,” Okta co-founder and CEO Todd McKinnon said.
McKinnon said Okta is helping organizations discover AI agents, secure their connections, govern their actions and respond when problems arise, allowing customers to deploy agents more safely and at scale.
Okta offers products including Okta for AI Agents and Auth0 for AI Agents, designed to help organizations discover agents, secure their connections, govern their permissions and respond to suspicious activity.
The company is also expanding its identity threat detection capabilities through its acquisition of Permiso Security. Okta announced the agreement in July and said Wednesday that the transaction had closed.
Permiso provides a cloud-native platform that detects and mitigates threats involving human, non-human and agentic identities across multi-cloud environments. The acquisition extends Okta’s reach into identity threat detection and response, providing visibility into suspicious behavior that occurs after authentication.
Okta plans to combine Permiso’s runtime detection and identity posture management capabilities with its identity security platform. Permiso’s P0 Labs threat research team will also join Okta’s research operation.
Following the stronger quarter, Okta raised its fiscal 2027 forecast. The company now expects annual revenue of between $3.216 billion and $3.226 billion, representing growth of 10% to 11%.
